Final answer:
The primary market for a bond is where it is initially issued and sold by the original issuer, while the secondary market is where previously issued bonds are traded between investors.
Step-by-step explanation:
The primary market for a bond is where the bond is initially issued and sold by the original issuer, such as a government or corporation, to investors. In this market, the issuer receives the money from the sale of the bond. Examples of primary market transactions include initial public offerings (IPOs) and new bond issues. The primary market is often referred to as the market for new securities.
The secondary market, on the other hand, is where previously issued bonds are traded between investors. In this market, the bondholder sells their bonds to other investors who are willing to buy them. The transactions in the secondary market do not involve the original issuer of the bond. Examples of secondary market transactions include buying or selling bonds on stock exchanges or through online trading platforms.
To summarize, the primary market is where bonds are initially issued and sold by the original issuer, while the secondary market is where previously issued bonds are traded between investors.